08 May 2024 AEST
Canopy Growth Corporation (TSX:WEED, NYSE:CGC) has kicked off its expansion into the US market as it exercised options to acquire American cannabis assets Wana Brands and Jetty Extracts.
This comes after shareholders of Canopy Growth last month approved a new exchangeable share structure that will allow it to operate in the US under a US-domiciled holding company called Canopy USA.
Ontario-headquartered Canopy said on Tuesday the exercise of its options to acquire Wana Brands and Jetty Extracts is a critical step in allowing it to establish a “leading, brand-focused powerhouse.”
The company expects the acquisitions will bring financial benefits, including revenue growth and cost synergies across Canopy USA.
Notably, the company said it is not required to pay additional consideration to acquire cannabis edibles brand Wana and California-based cannabis extracts and clean vape technology company Jetty.
“With these acquisitions now triggered, Canopy USA has taken a crucial step forward in bringing together these high potential businesses and will soon be able to demonstrate the full potential of this ecosystem across the US cannabis market,” CEO David Klein said.
“In addition to the positive signals we’re seeing on near-term regulatory reform in the US, there’s significant potential in putting together leading brands like Wana and Jetty, and we’re excited to see how these brands can collaborate to become even stronger.”
Shares of Canopy Growth traded higher on the news, adding 1.5% at $9.85 shortly before noon on Tuesday.
The stock is up 105% in the year-to-date buoyed by its US expansion plans and the recent news the Drug Enforcement Administration (DEA) will approve the rescheduling of marijuana as a lower-risk Schedule 3 drug.
